Behavioral Economics Research Articles

A future beyond ourselves: Self-oriented prospection predicts increased intergenerational responsibility

Do differences in how people think about their own futures predict responsibility for the collective future welfare of humanity? Across a reanalysis of existing data, four primary studies, six supplemental studies, and an internal meta-analysis (NTotal = 11,261 US participants), we investigate how individual differences in self-oriented prospection relate to intergenerational responsibility, elucidating theoretical and practical implications for the psychologies of future-thinking and intergenerational ethics alike. We consistently observe an association between Future Self-Continuity (FSC; variation in the amount of perceived overlap between people's present and future self-concept) and Consideration of Future Consequences (CFC; individual differences in tendencies to consider how present actions impact one's own future life outcomes) with increased feelings of responsibility for, perceived efficacy to impact, and identification with future generations. Drawing upon insights from behavioral economics, Construal Level Theory, and research on moral expansiveness, our results begin to reconcile the literatures studying the adaptive functions of self-oriented prospection with disparate lines of inquiry into the individual differences that mitigate tendencies to prioritize present over future generations. Moreover, the present findings open new avenues for further research to explore potential practical benefits of self-oriented prospection for bolstering efforts to improve long-term collective welfare.

Fentanyl demand and seeking in female rats: Role of the orexin system and estrous cycle

The orexin system plays a major role in drug reward. Orexin-1 receptor (OxR1) blockade reduces fentanyl demand in males. However, there are a number of sex differences in the orexin system, and it is unclear how OxR1 antagonism would decrease fentanyl demand in females. Furthermore, the relationships between the estrous cycle and fentanyl intake are yet to be delineated.Here, we conducted a behavioral economics (BE) procedure in female rats to assess the effects of the OxR1 antagonist SB-334867 on fentanyl demand before and after short-(ShA), long- (LgA) or intermittent-access (IntA) self-administration of fentanyl; we also tested the effect of SB-334867 on cued reinstatement of fentanyl seeking. Finally, we measured the impact of the estrous cycle on fentanyl demand, intake and seeking.Results showed that in females SB-334867 did not consistently modulate demand for fentanyl before or after chronic access periods. However, SB-334867 at 30mg/kg reduced the number of active lever presses during cued-reinstatement of fentanyl seeking. We also found that fentanyl self-administration disrupted estrous cyclicity, in particular proestrus epochs, an effect that depended on short versus chronic access. Furthermore, extended access to fentanyl shifted the role of progesterone from facilitation of fentanyl demand during short periods, to attenuation of fentanyl demand after long term exposure. These results indicate that an orexin-based therapy in women for treating opioid use disorder must consider prior drug history as well as cycle phase.

Self-control failures, as judged by themselves

AbstractThe existence of self-control failures is often used to legitimize public policy interventions. The argument is that reducing self-control failures can make people better off, as judged by themselves. However, there is only scarce evidence on the frequency and welfare costs of self-control failures. This paper presents a survey method that allows us to measure self-control failures in everyday life and to identify their welfare costs in terms of associations with experienced subjective well-being. We present novel survey evidence using this method and discuss its implications for behavioural welfare economics and behavioural public policy.

Implication of Financial Services Marketing: A Study with reference to Behavioral Economics

Abstract Purpose – It has been argued that the insights provided by behavioral economics have profound Implications for the study and practice of marketing. The purpose of this paper is to provide a detailed analysis of how such insights help enhance understanding of aspects of marketing and consumer behavior in financial services markets. Design/methodology/approach – This paper looks at various facets of behavioral economics Which it is felt provide particularly important and salient insights in the context of financial services. In particular, it studies loss aversion and prospect theory, status quo bias and defaults, framing and anchoring effects, hyperbolic discounting, availability effect and salience and over-confidence. In doing so, it provides a number of examples from the financial services context which provide insightful and informative insights for both commercial practitioners and policymakers. In each case, relevant phenomena are introduced and explained before providing a number of applications and examples from the financial services domain. Findings – The authors find that the insights afforded by behavioral economics are useful in helping to explain various aspects of consumer behavior in financial services markets. It is shown that an understanding of the implications of behavioral economics may help in fashioning a choice architecture that is more likely to bring the desired consumer response, from either a commercial or policymaking perspective. Practical implications – This analysis provides important insights for those responsible for the Marketing of financial services, policymakers in the financial services domain, third sector agencies seeking to foster greater engagement with financial services and other interested parties. Originality/value – The paper adds value by drawing together various aspects of behavioral Economics, providing an analysis of their relevance to financial services marketing and offering Numerous examples and applications. Keywords-: Financial services, Behavioral economics, Consumer behavior in financial services, Marketing Paper type-: Conceptual paper

Innovative Approaches to Strengthening Preventative Care in Contemporary Healthcare: A Systematic Review

Preventative care plays a critical role in reducing disease burden, improving patient outcomes, and lowering healthcare costs in contemporary medicine. However, the effective implementation of preventative care strategies faces numerous challenges, including technological, financial, and social barriers. This systematic review explores innovative approaches aimed at strengthening preventative care in modern healthcare systems. Key innovations include the use of telemedicine, artificial intelligence (AI), personalized medicine, and community-based public health initiatives. Telemedicine and AI have revolutionized early detection and risk assessment, while personalized medicine and genomic screening allow for tailored preventative interventions. Additionally, behavioral economics and health education programs have proven effective in promoting healthier lifestyles and improving adherence to preventative measures. The review evaluates the impact of these innovations on patient outcomes and highlights both the benefits and challenges of implementing these approaches. While the advancements offer promising results, further research is needed to address issues related to equity, ethical concerns, and global applicability. This review provides valuable insights for healthcare providers, policymakers, and researchers looking to enhance the effectiveness of preventative care strategies in contemporary healthcare systems.

History of behavioral accounting research (1960–2023): a bibliometric analysis

Purpose This study aims to examine the over 60-year evolution of behavioral accounting research (BAR), with the main aim of critically and accurately tracing its past, present and future. Design/methodology/approach This study used Scopus and Google Scholar databases to collect 2,263 articles of BAR published on relevant accounting journals. Thus, this study used Bibliometrix to provide a temporal overview of articles and a temporally oriented network co-occurrence analysis of BAR topics. Findings This study retraces the history of BAR since its origins and, also on the basis of triggering events inside (e.g. Nobel Prizes for behavioral economics studies) and outside (e.g. accounting scandals) the academic debate, this study critically discusses the evolution and interconnections of BAR topics. Then, future research is addressed toward main promising avenues, thus integrating recent technological applications into the behavioral accounting experimental designs to improve their external validity, exploring the potential positive effects of professionals’ heuristics in performing accounting tasks under certain environmental conditions, exploiting behavioral accounting frameworks to analyze and improve sustainability reporting and sustainability performance management. Originality/value Although BAR is rich of contributions, including subfields and contaminations, it lacks a holistic evaluation of its origins, development and future perspectives. In this vein, to the best of the authors’ knowledge, this is the first study to use a bibliometric analysis to evaluate the evolution of BAR.

Cognitive Biases in Sports: Examining Their Influence on Athletic Decision-Making

Traditional economic theory has long relied on the notion of rationality, which assumes that individuals will always make decisions leading to the optimal level of benefit or utility for themselves. However, behavioural economics, a subfield of economics, proposes that decision-making is not always rational, as emotions and cognitive biases influence it. In line with this, the dual processing system highlights how decisions may be made via one of two systems: the first characterised by relatively fast and nonconscious decision-making and the latter by slower and more conscious thinking. This research paper extends the literature on behavioural economics into the realm of sports, as it is a context where time is of the essence, and decisions need to be made on the spot. Primary research was conducted among a group of amateur athletes. The findings suggest that cognitive biases, including availability heuristic, anchoring bias, sunk cost fallacy, and framing bias, among others, influence the decisions made by athletes. The paper also proposes methods to overcome these biases.

The influencing factors of willingness to participate in crop rotation and fallow: A behavioural economics perspective

AbstractCrop rotation and fallow practices are increasingly adopted to mitigate ecological resource pressures and accelerate the development of modern agriculture. These practices have significant implications for environmental protection, soil quality enhancement and the promotion of sustainable, high‐quality agricultural development. Despite their importance, empirical research on the factors influencing participation in crop rotation and fallow remains limited and comparative analyses of different compensation scenarios are scarce. This study, grounded in behavioural economics, utilizes data from the China Rural Revitalization Survey (CRRS) and employs propensity score matching (PSM) and binary logistic regression models to analyse farmers' behaviour regarding both induced and voluntary crop rotation and fallow. The research aims to identify the factors that influence farmers' decisions to engage in these practices. The findings indicate that, under a fixed subsidy standard, the participation rates for crop rotation and fallow were 14.5% and 5.4%, respectively. Among the farmers participating in crop rotation, 43.8% were induced, while 56.2% were voluntary. For fallow practices, 47.9% of the participants were induced and 52.1% were voluntary. In the context of induced crop rotation and fallow, ecological subsidies significantly increased farmers' willingness to participate (p‐value <.001). Conversely, in voluntary contexts, resource endowment had a significantly positive impact on crop rotation behaviour (p‐value <.1), whereas path dependence and policy awareness significantly constrained fallow behaviour (p‐value <.05). The impact of ecological subsidies on farmers' crop rotation and fallow behaviour varied significantly across different ecological regions, with other factors also exhibiting notable heterogeneity. The results of this research offer valuable guidance for the implementation of future crop rotation and fallow programmes. Additionally, they provide insights into the relationship between ecological subsidy systems and farmers' welfare in other underdeveloped areas, suggesting improvements and offering new perspectives for further research.

Nudging law enforcement: evidence from low priority initiatives

The effect of non-binding guidelines (nudges) on citizens’ compliance with law has been studied theoretically and empirically in behavioral law and economics. Less is known about the impact of non-binding guidelines on the behavior of law enforcement agents and prosecution. Our work fills this gap. We study whether non-binding guidelines affect law enforcement and prosecution practices when the guidelines are not necessarily aligned with legal actors’ preferences. Our empirical analysis focuses on the impact of the adoption of a low priority initiative (LPI) on police and prosecutor behavior in Los Angeles County. Our results suggest that following the introduction of an LPI there is a rise in the number of misdemeanor arrests, but not in the rate that misdemeanor marijuana offenses are dismissed. We conclude that law enforcement preferences have a counterbalancing effect given that police officers may have strong punitive preferences. Prosecutors do not appear to respond to non-binding guidelines as evidenced by no change in the rate of dismissing cases.

Leveraging behavioral economics strategies to close gaps in biomedical HIV prevention.

Adolescent girls and young women (AGYW) in southern Africa face triple the HIV incidence of their male peers due to multiple factors, including economic deprivation and age-disparate relationships. A new study by Aurélia Lépine and colleagues has demonstrated that addressing healthcare costs among AGYW has the potential to reduce HIV incidence.

A Review of Research on Employee Incentive Mechanisms and Firm Performance from the Perspective of Behavioral Economics

This paper reviews the relationship between employee incentives and corporate performance from the perspective of behavioral economics. As the limitations of traditional material incentive theory gradually emerge, behavioral economics provides new theoretical support for the optimization of incentive mechanisms. This paper first explores the core concepts of behavioral economics, including loss aversion, intrinsic motivation, framing effects and social norms, and compares them with traditional incentive theories. By analyzing the additions and modifications of behavioral economics to incentives, it reveals how it affects incentive design, which in turn improves employee motivation and corporate performance. In addition, this paper demonstrates the successful application of behavioral economics principles in corporate incentives by combining practical cases and discusses the marginal effects and potential problems of incentives. Finally, this paper summarizes the effectiveness of the application of behavioral economics in the design of incentives and proposes directions for future research, such as personalized incentives, long-term incentive effects, cross-cultural research and technology-driven incentive design. The study shows that by scientifically designing incentive mechanisms, companies can more effectively motivate employees, improve overall performance, and achieve long-term sustainable development.

Research on Cultural Consumption from the Perspective of Mental Accounting

Behavioral economics emerged in the late 1970s and early 1980s. Compared to traditional economics, its theory is based on bounded rationality and combines with disciplines like psychology to address the limitations of traditional economic theory, providing more convincing explanations for market phenomena. Behavioral economics covers a wide range of topics, and this paper focuses on the perspective of mental accounting to study cultural consumption. Cultural consumption is the endogenous driving force for the development of the cultural industry. The psychological factors behind cultural consumption are key to influencing consumption decisions. Adopting the mental accounting theory from behavioral economics, residents' cultural consumption mental account consist of three main categories: economic capital account, cultural capital account, and social capital account, as well as six sub-accounts: transaction cost account, sunk cost account, leisure and entertainment account, aesthetic value account, social interaction account, and identity differentiation account. These accounts can effectively explain the influence mechanism between utility changes and cultural consumption behavior decisions. Based on the connotation and mechanism of the cultural consumption mental account theory, formulating various bundled sales strategies, reducing the sunk costs of cultural consumption, and promoting the high-quality development of the cultural industry are important paths to expand residents' cultural consumption. By integrating insights from behavioral economics, this approach can provide more effective solutions to boost cultural consumption and drive the sustainable development of the cultural industry.

GPT-3.5 altruistic advice is sensitive to reciprocal concerns but not to strategic risk

Pre-trained large language models (LLMs) have garnered significant attention for their ability to generate human-like text and responses across various domains. This study delves into examines the social and strategic behavior of the commonly used LLM GPT-3.5 by investigating its suggestions in well-established behavioral economics paradigms. Specifically, we focus on social preferences, including altruism, reciprocity, and fairness, in the context of two classic economic games: the Dictator Game (DG) and the Ultimatum Game (UG). Our research aims to answer three overarching questions: (1) To what extent do GPT-3.5 suggestions reflect human social preferences? (2) How do socio-demographic features of the advisee and (3) technical parameters of the model influence the suggestions of GPT-3.5? We present detailed empirical evidence from extensive experiments with GPT-3.5, analyzing its responses to various game scenarios while manipulating the demographics of the advisee and the model temperature. Our findings reveal that, in the DG Dictator Game, model suggestions are more altruistic than in humans. We further show that it also picks up on more subtle aspects of human social preferences: fairness and reciprocity. This research contributes to the ongoing exploration of AI-driven systems’ alignment with human behavior and social norms, providing valuable insights into the behavior of pre-trained LLMs and their implications for human-AI interactions. Additionally, our study offers a methodological benchmark for future research examining human-like characteristics and behaviors in language models.

Breaking the Rationality Assumption

This paper explores the role of Behavioral Economics in understanding how psychological factors influence consumer decisions, often leading to irrational choices. Traditional economics assumes rational decision-making, but in reality, emotions, cognitive biases, and social factors drive behavior. The paper highlights how illiteracy impacts decision-making, forcing short-term thinking over long-term benefits. It also discusses how psychological barriers like overconfidence, peer pressure, and emotional responses prevent rational decisions. Several Indian government policies, such as the Population Control Policy, Reservation System, and Demonetization, are reviewed to show how poor execution can lead to negative consequences. The paper concludes by emphasizing the need for better education, critical thinking, and informed policymaking to improve decision-making and empower people to make rational choices. Effective decision-making requires understanding both economic and psychological factors, which can lead to more balanced, thoughtful choices for the betterment of society.

Stoic Economics: A Theoretical Examination of a Shift in Consumer Philosophy towards Stoicism

Since the advent of modern economic thought, particularly within Behavioral Economics, consumer behavior has primarily been driven by psychological and utilitarian beliefs that prioritize self-interest and material accumulation. Now, as consumer mindfulness becomes a prevalent issue, we look to philosophy — rather than psychology — as a framework for consumer behavior. Stoicism, originating in Ancient Greece and Rome, has always been applied to individual well-being but has never been considered in the context of collective economic behavior, despite its basis aligning well with the basic economic problem of scarcity. We examine whether and to what extent virtue-based principles of Stoicism can shift economic activity, both for consumers and the economy at large. Through understanding of key tenets of stoicism, and translating these philosophical ideals to economic assumptions, we find that the stoic focus on long-term stability, rational decision-making, and the use of wealth for public good leads to deviations from the status quo of market activity.

The Application of Behavioral Economics to Teacher Professional Development

The Application of Behavioral Economics to Teacher Professional Development

Do Consumers Respond to Social Movements? Evidence from Gender-Stereotypical Purchases After #MeToo

This paper explores whether and how consumers respond to global social movements challenging systemic discrimination and stereotypes. We examine the impact of the #MeToo movement on the market for products with stereotypical markers of femininity. Our analysis of high-frequency stockout and price data from a leading global fashion retailer spans from January 2017 to December 2018 and covers 32 countries, or 89% of the Organization for Economic Cooperation and Development (OECD) population. Using a triple-difference approach across time, countries, and products, we identify changes in product-level stockouts, corresponding to a drop in the purchase of stereotypically “feminine” items. Our findings suggest a sudden shift in demand, with no immediate adjustments in product assortments or pricing. We discuss potential driving mechanisms, as well as implications for product management and marketing in marketplaces where segmentation is gender based. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.02352 .

The Role of Nudges and Behavioral Interventions in Financial Decision Making

Financial decision-making, both at individual and institutional levels, plays a critical role in determining economic outcomes. Traditional economic theory posits that individuals are rational agents who make decisions based on complete information and a consistent set of preferences. However, behavioral economics has challenged this notion, highlighting cognitive biases, heuristics, and social influences that can drive suboptimal decisions. Nudges and behavioral interventions have emerged as tools to guide individuals toward better financial choices without restricting their freedom of choice. The purpose of this research is to present a descriptive investigation of behavioral interventions and nudges in financial decision-making. The main cognitive biases influencing financial behavior are first described, and then several nudge kinds and their applicability in diverse financial contexts— retirement savings, debt management, spending control, and investment decisions—are explored. Along with reviewing empirical data on nudges' efficacy, the paper addresses the ethical issues surrounding their application and pinpoints the variables that affect their effectiveness. This study aims to educate consumers, financial institutions, and policymakers about the potential advantages and constraints of behavioral interventions by providing a thorough overview of how nudges might impact financial decision-making. Keywords: Nudges, Behavioral Intervention, Financial Decision-Making, Cognitive Biases, Financial Literacy.

LOSS AVERSION: THE UNSEEN FORCE SHAPING INVESTMENT DECISIONS

This research paper aims to investigate the profound impact of loss aversion on individual investment decision-making, with a specific focus on its influence on risk preferences. Loss aversion, a key concept in behavioral economics, posits that individuals experience a greater psychological impact from losses than equivalent gains, thereby shaping their decision-making processes. The study employs an empirical approach, utilizing a diverse sample of individual investors to analyze how loss aversion interacts with risk preferences and influences investment choices. The research methodology involves a combination of surveys and data analysis to explore the intricate relationship between loss aversion and risk preferences. By examining real-world investment decisions in various market conditions, the study seeks to identify patterns and behavioral tendencies that emerge when individuals confront potential losses in their investment portfolios. The research design also considers demographic factors, financial literacy, and other relevant variables to provide a comprehensive understanding of the factors influencing investment choices. Ultimately, this study aims to enhance our comprehension of the psychological factors driving individual investment decisions and to inform the development of strategies that mitigate the negative impacts of loss aversion on financial outcomes.

Cognitive Biases in Financial Decisions Made by Teenagers

Teenagers are a vital part of the economy today and make up a large proportion of the consumer industry. In a highly digitalised world, teenagers and adolescents have a strong and active presence on social media and influencers and marketers are reaching out to this demograph who are now a backbone in the decision making process in most families. Behavioral Economics, a relatively recent branch of the science, unlike traditional approaches which believe that people make economic and financial decisions on utility, suggests that financial decisions are more likely to be made by people on the basis of their inherent cognitive biases, their sense of fairness and psychological biases such as loss aversion and overconfidence bias. This study aims to extend this hypothesis to study adolescent and teenage behavioural patterns and answer the question how.